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Financial liberalisation, political stability, and economic determinants of real economic growth in Kenya

Yakubu, Zakaria and Loganathan, Nanthakumar and Mursitama, Tirta Nugraha and Mardani, Abbas and Khan, Syed Abdul Rehman and Hassan, Asan Ali Golam (2020) Financial liberalisation, political stability, and economic determinants of real economic growth in Kenya. Energies, 13 (13). ISSN 1996-1073


Official URL: http://dx.doi.org/10.3390/en13133426


This study aimed to analyse financial liberalisation, political stability, and economic determinants of Kenya s real economic growth using time series data over the period of 1970 2016. The authors specified quadratic and interactive models to be estimated by employing a quantile regression analysis. The traditional and quantile unit root test was used in testing the stationarity issue. The co-integration findings indicated that the capital account openness and financial development impede on real economic growth; and the political stability also had potential influence on the real economic growth of Kenya. Interestingly, there is a nonlinear U-shape link between financial development and real economic growth that undermined the real economic growth at its onset, but as it advanced, it enhanced the growth of the country in the long run. The policymakers should ensure that the capital account is more liberalised so that it will continue to stimulate the financial development. In the same way, the liberalisation of the domestic financial market should be taken in earnest to overcome the negative effects of financial repression in totality, while maintaining the stable political atmosphere.

Item Type:Article
Uncontrolled Keywords:political stability policy, quantile estimates, real economic growth, resource policy, trade openness
Subjects:H Social Sciences > HB Economic Theory
H Social Sciences > HF Commerce
Divisions:International Business School
ID Code:91799
Deposited By: Yanti Mohd Shah
Deposited On:28 Jul 2021 16:47
Last Modified:28 Jul 2021 16:47

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